GBP/USD bears now eyeing a decisive break below 1.35 handle

   •  Retreats nearly 100-pips from intraday highs on resurgent USD demand.
   •  Investors’ reluctance to place aggressive bets might limit further downside.
   •  All eyes remain glued to the latest BoE monetary policy update on Thursday.

The GBP/USD pair extended its intraday retracement slide, with bears now eyeing a follow-through weakness below the 1.35 handle.

After an initial uptick to the 1.3600 neighborhood, the pair came under some renewed selling pressure and fell nearly 100-pips from session tops amid resurgent greenback demand. In fact, the key US Dollar Index jumped to fresh YTD tops and was seen as one of the key factors behind the pair's sharp fall since the early European session.

With the USD now consolidating daily gains, closer to the 93.00 handle, the selling pressure now seems to have abated, at least for the time being, with the pair rebounding around 15-20 pips from session low level of 1.3496. 

Meanwhile, the pair's resilience to decisive weaken below the key 1.3500 psychological mark could also be attributed to investors' resilience to place any aggressive bets ahead of the next big event risk - the BoE Super Thursday.

With the recent underwhelming UK economic data diminishing prospects of an eventual BoE rate hike move, the central bank's quarterly inflation report and the accompanying minutes will be closely scrutinized to determine the next leg of directional move for the major.

Technical levels to watch

Bears would be eyeing for a decisive break through the 1.3500 mark, below which the pair is likely to accelerate the fall further towards the 1.3465-60 support area. On the upside, momentum back above the 1.3540 region (200-day SMA) might continue to confront some fresh supply near the 1.3590-1.3600 area. Any subsequent up-move beyond the mentioned hurdle is likely to be capped at an important support break-point, now turned resistance, near mid-1.3600s.